October 23, 2008

Global grain projections up to 1,094.3 million tonnes

World coarse grain production in 2008/09 is projected up 7.6 million tonnes to 1,094.3 million tonnes according to estimates of the economic Research Service of the US Department of Agriculture.

Much of the increase is in the US, with foreign production up 2.9 million tonnes and foreign corn production down 1 million tonne this month.

Corn production prospects for 2008/09 in Brazil were cut 2 million tonnes to 55 million tonnes. Planting of the main crop is beginning, and the incentives to plant are not enough to maintain area. Corn prices have been dropping worldwide, and a large, recently harvested second-season corn crop has depressed corn prices in Brazil. Moreover, corn is expensive to grow, requiring more fertiliser than soy, the main alternative.

Tight credit and existing farm debt are also expected to restrict corn area planted in Brazil. Corn area harvested was cut 0.5 million hectares this month to 14.3 million, and is now showing a year-to-year decline.

EU corn production is projected up 1 million tonne this month to 59.2 million tonnes mostly due to higher area and yields reported in France.

Belarus reported less area harvested for grain and more modest yields, trimming production 0.3 million tonnes.

This month's production was reviewed for Sub-Saharan Africa, resulting in small changes to many countries. The largest changes were a 0.5 million tonne increase for total corn use in Ghana, and a 0.4 million tonne decrease for Malawi.